Real Estate DevelopmentDuring the second quarter of fiscal year 2012, the Company continued to execute its real estate development strategy by capitalizing development costs of $654,000 compared to $1.5 million in the same period of fiscal year 2011. Recent Business Highlights The Company continues to benefit from the success of its direct lemon sales and marketing strategy. In the second quarter of fiscal year 2012, lemon sales were comprised of approximately 75% to U.S. and Canada-based customers and 25% to domestic exporters. Alex Teague, Senior Vice President, stated, “Our direct lemon marketing and sales strategy has now been implemented for over one year, and we are extremely pleased with its success. In the second quarter, we sold approximately 102,000 more fresh lemon cartons than the second quarter of last year, and we are looking forward to continued growth throughout this year.” In January 2012, the Company entered into a series of operating leases for approximately 1,000 acres of lemon, orange, specialty citrus and other crop orchards in Lindsay, California. Each of the leases is for a ten-year term and provides for four five-year renewal options with an aggregate base rent of approximately $500,000 per year. The leases also contain a profit share arrangement with the landowners as additional rent on each of the properties and a provision for the potential purchase of the property by Limoneira in the future. On March 22, 2012, the Company announced an agreement with Associated Citrus Packers of Yuma, Arizona to pack and market lemons. Associated Citrus Packers has historically packed approximately 850,000 cartons of lemons grown on nearly 2,000 acres. Associated Citrus harvests and packs lemons, Rio Red grapefruit, Mineola tangelos, Navel oranges, Blood oranges and Valencia oranges. The commercial citrus harvesting and packing season in Southwestern Arizona typically begins in late August and is completed during the spring of the following year. This strategic alliance will greatly enhance product and service for customers and growers alike due to greater efficiencies that Limoneira’s and Associated Citrus Packers’ combined efforts will provide.